Our lives are arguably the most valuable “possessions” we own and because we are quick to insure our cars and our homes, insuring our lives should be a no-brainer. This being said, it is not uncommon for instances to arise where your current life insurance policy is no longer needed.

The most common reaction to an unwanted policy is to surrender it in order to free yourself from the premium payments. While this seems practical, it is important to consider that even a policy without cash surrender value could have value of another kind, especially if your health has changed.

An alternative option for dealing with an unwanted policy is to donate it to a charity. With the assistance of an actuary who would determine the value of your policy, you are able to donate your insurance policy to a registered charity. Through this donation the charity becomes the owner and beneficiary of the policy and you, the donor, will receive a donation receipt for the value of the policy. If you continue to pay premiums on the policy you will also receive a donation receipt equal to the premiums paid.

This method of gifting allows you to use donation tax credits over your lifetime so that you can receive benefits while no longer owning the policy you have no use for. Speak to your life insurance advisor to determine if donating, not surrendering, will work for you.



Did you know that over 50% of Canadians do not have a will?*  While some don’t know how to get started, others believe they can’t afford it.

Are you part of the 50% who don’t have a will? Having a will is an important part of your estate plan. Without a will, your assets would be distributed as per provincial intestate legislation. This process takes time, can increase costs, and will probably not match your wishes for your estate. If you have assets and want to give direction for the distribution of assets upon death, you need a will.

Get started now by working with your lawyer or asking your advisor for a recommendation for a lawyer they have worked with. It will be helpful to get a list of information the lawyer will request in order to gather what’s needed to create the will in advance of the meeting.

If you have concerns about the financial aspect of your estate distribution, your advisor can discuss an insurance solution that can help ensure your desires are met without negative financial consequences. For example, if you have a piece of property to give one child you may want to give your other child an equal share to make it equitable. An insurance solution may help depending on the circumstances.

By sharing a copy of your will with your advisor, they can help ensure all your financial documents align with your wishes.

Speak with your advisor to learn more about having a current will and the importance of it.


*Source: Lawyers’ Professional Indemnity Company (LawPRO), May 2012

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An Alternative Investment for Capital Preservation & Estate Planning

Segregated Investment Funds are often misunderstood and underutilized by Financial Advisors and other Estate Planning professionals.

The investment funds offered through insurance carriers provide unique benefits guarantees. Segregated funds offer both death benefit and capital guarantees in various forms. Some plans offer 100% death benefit guarantees from day 1 as well as capital guarantees starting from 15 years.

In the modern world’s drive to get to the lowest cost many Financial Advisors don’t want to go towards segregated funds with their higher investment management fees. Depending on the guarantees, the additional MER fees for the funds can be anywhere between +0.25% and +0.85%. And in many cases there is no requirement to have these additional fees in an individual’s portfolio, but there are a number of areas where these plans work very well. Particularly for individuals as they approach retirement age as well as business owners and professionals.

These days it isn’t easy to obtain return or yield. The markets are more fully valued and fixed income is not a safe haven with the prospect of rising interest rates, individuals heading towards retirement want more than 2% on guaranteed investments but are fearful if they will have time to recover from a market crash while they are drawing income from their capital. With a segregated fund individuals could take more risk in some cases as they know that their capital would be guaranteed at retirement.

Segregated funds can be a great tool for the elderly affluent as well. Today most seniors will have discretionary money invested in the markets, but what happens if death occurs during a market crash like in 2008 where the market shrunk by approximately 40%. There are segregated funds available where as long as the contract is open before age 80 that 100% of all capital will be guaranteed; with this protection suddenly the additional segregated fund fee becomes inconsequential.

Other benefits of the segregated fund contracts are that the proceeds bypass the estate; this can become important in estate planning, especially in provinces outside of Quebec where probate fees equal a couple of percent of all assets.

Furthermore segregated funds are generally creditor proof, which is an important benefit for business owners or professionals (doctors, dentists, lawyers, etc.). Traditional investments can be seized by creditors in a litigation situation whereas segregated funds are generally creditor protected with a named beneficiary.
Segregated funds also offer settlement options; this can be important when leaving funds to children or other beneficiaries without the requirement of having a family trust set up, which can be costly for the initial set up plus yearly administrative fees.

To conclude, there are a number of pertinent points to consider in looking at the benefits of segregated funds. Again many financial advisors don’t look at these funds because of the additional management fees, as well as the perception of these investments as not being sophisticated and the complexity of understanding the various guarantees offered by the different carriers. However segregated funds offer a large universe of investments to choose from with many internal and external fund managers available. Therefore in any situation these funds will provide a good alternate investment in an individual’s asset mix.

If there are questions about segregated investment funds, feel free to contact our office for more information


In May 2017, the Canadian parliament passed the Genetic Non-Discrimination Act (GNA) – formerly known as Bill S-201. This Act, meant to prohibit and prevent discrimination, states that genetic test information can no longer be requested or used in rendering underwriting decisions. How this bill will impact underwriting and product pricing remains to be seen.

In 2013, actress and activist Angelina Jolie announced that she is a carrier of the inherited BRCA breast and ovarian cancer gene mutation. As a preventative measure, she underwent a prophylactic mastectomy and preventative hysterectomy to reduce the risk of developing these cancers. Following her announcement, a study in The British Medical Journal* revealed a large spike in the number of BRCA testing requests. This highlighted the power of celebrity endorsements as well as the public’s concern of breast cancer being a major health issue.

If your insurance advisor, an insurer, or other professional, has asked for your genetic test information to be disclosed, be aware that you are not required to share your genetic test results with anyone and have the right to decline the request. However, in cases where genetic test results may prove to be favourable from an underwriting standpoint, then you may offer this information to the professionals you work with but just be sure to provide explicit consent.

Be sure that you work with an advisor who will ensure equitable, compliant and prompt treatment of your case in light of the changed legislation – and most importantly, look after your well-being.

Contact your advisor today to discuss your insurance plan.

To learn more about the Genetic Non-Discrimination Act, please visit the Government of Canada Justice Laws website.

*Source: British Medical Journal, 2016; 355: i6357, Anupam b. Jena et al.


Read Article Here – Updated October 25, 2018

Planning for the transition of wealth to your children and grandchildren doesn’t have to be a daunting task. It’s important to start discussing this now so you can understand the impact of tax on your estate assets and what steps you can take to plan for the future.

Let’s consider some of the tax implications. Upon death, a person is deemed to dispose of all their assets at fair market value which can result in tax (excludes your principle residence). However, there is an exception for assets rolled to a spouse. Assets that pass through the estate before being distributed to your beneficiaries are subject to probate fees. As well, there could be will challenges and known or unknown creditors that could reduce the assets and impact of your estate goal.

If you are concerned about the overall impact to your estate and objectives related to the disposition of your assets upon death, a life insurance policy with a named beneficiary can help alleviate many of those concerns. As well, investment assets can be transferred into an exempt life insurance policy and investment growth during your lifetime would not be subject to tax unless funds were withdrawn. This would allow capital to grow in a more effective manner and the insurance proceeds would add to the amount of capital available for your family.

Did you know that insurance proceeds are not subject to income tax? In addition, by designating a beneficiary (other than the estate) of the policy, the proceeds pass outside of the estate and therefore are not subject to probate fees. Additional benefits of designating a beneficiary are creditor protection and the beneficiary designation cannot be disputed through a will challenge.

Speak with our advisors to learn more about using a life insurance policy to transfer wealth efficiently to the next generation.



How the 2019 Passive Investment Income Changes Affect Your Small Business. After a lot of public debate in the tax and small business community around the way in which passive investment income is taxed in Canadian controlled private corporations, the changes that were announced in the 2018 Federal Budget are now law. These changes will limit the amount of the small business deduction for many corporations. Click here to read the article.

Contact us to help determine the best solution for you and your corporation


If you are interested in creating a legacy at your death by making a charitable donation, you may wish to investigate using life insurance for that purpose. There are different ways you can structure life insurance for use in philanthropy. The most common are:

Getting an Existing Life Insurance Policy

If you currently own a life insurance policy, you can donate that policy to a charity. The charity will become owner and beneficiary of the policy and will issue a charitable receipt for the value of the policy at the time the transfer is made, which is usually the cash surrender value of the existing policy.

There are circumstances, however, where the fair market value may be in excess of cash surrender value. If, for example, the donor is uninsurable at the time of the transfer, or if the replacement cost of the policy would be in excess of the current premium, the value of the donation may be higher. Under these conditions, it is advisable for the donor to have a professional valuation of the policy, done by an actuary, prior to the donation.

Any subsequent premium payments made to the policy by the donor after the transfer to the charity will receive a charitable receipt.

Gifting a New Life Insurance Policy

In this situation, a donor would apply for a life insurance policy on his or her life with the charity as owner and beneficiary of the policy at the time of issue. All premiums made by the donor on behalf of the charity would be considered as charitable donations.

Gift of the Life Insurance Death Benefit

With this strategy, an individual would retain ownership of the policy but would name the charity as the beneficiary. Upon the death of the insured, the proceeds would be paid to the charity and the estate of the owner of the policy would receive a charitable receipt for the death benefit proceeds. The naming of the charity can be made at any time prior to death. There is no required minimum period that must be satisfied prior to naming the charity as beneficiary.

As long as the life claim is settled within 3 years of death the executor of the estate has the option to claim the life insurance donation on:

  • The final or terminal return of the insured;
  • The prior income tax year’s return preceding death of the insured;
  • Both the current and prior year tax returns with any excess amount able to carry forward for the next five subsequent years;
  • Any combination of the above.

With this strategy, there are no charitable receipts issued while the insured is alive, only after death when the insurance proceeds are paid to the named charity.

Replacing Donated Assets to the Estate

There may be circumstances where a sizeable donation is made to a charity that would greatly reduce the value of the estate that would be left to family or other heirs. For donors who are concerned that their heirs would receive less than originally intended as a result of this donation, purchasing life insurance to replace the donated asset is a possible solution.

The previous headings represent the ways in which life insurance can enhance or complement philanthropy. As well, life insurance can be a valuable addition to a charitable giving program in that it enables the donor to bequeath a larger donation than otherwise would be possible with just hard assets alone.

If you have been or are contemplating making a significant charitable donation be sure not to overlook how life insurance can enhance your gifting plans.

Call us to see if donating to charity using life insurance is right for you or use the social sharing buttons below to share this article with a friend or family member you think might benefit from this information.



Why a Doctor Invented Critical Illness Insurance

Critical Illness insurance was invented by Dr. Marius Barnard.   Marius assisted his brother Dr. Christiaan Barnard in performing the first successful heart transplant in 1967 in South Africa. Through his years of dealing with cardiac patients, Marius observed that those patients that were better able to deal with the financial stress of their illness recovered more often and at much faster rate than those for whom money was an issue.  He came to the conclusion that he, as a physician, could heal people, but only insurance companies could provide the necessary funds to create the environment that best promoted healing.  As a result, he worked with South African insurance companies to issue the first critical illness policy in 1983.


Medical practitioners today will confirm what Dr. Barnard observed – the lower your stress levels the better the chances for your recovery.  When one is ill with a serious illness, having one less thing to deal with, such as financial worry, can only be beneficial.


Your Life Could Change in a Minute!

Case Study A – Lawyer, Male 55

Tom was a successful lawyer with a thriving litigation practice.  He had recently started his own firm and was recruiting associates to build the practice.  He was a single father assisting his two adult children in their post-secondary education.  Tom had always enjoyed good health, ate well, exercised regularly and was a competitive highly ranked (senior class) tennis player.

In 2006, at age 55, he was diagnosed with prostate cancer.  In addition to the emotional angst and anger at receiving this diagnosis he also was concerned about the financial impact this illness could have on both his practice and his support of his children. Fortunately, five years earlier at the urging of his financial advisor he had purchased a critical illness policy.

Within weeks of his diagnosis Tom received a tax free benefit cheque for $250,000.  He immediately called his advisor to tell him how elated he was that the advisor had overcome his initial objectives to purchasing the policy 5 years earlier.  He went on to say that with having the financial stress alleviated he was certain he would be able to tackle the treatment and concentrate on recovery in a positive manner.

Today, Tom is cancer free, his practice is thriving, and his children are successfully working in professional practices.


Case Study B – Retired Business Owner, Female 52

Christina at age 52 was enjoying a good life that came partially from the sale of her business a few years before.   Her investments were thriving and everything looked rosy.  Then 2008 came along.  As if the stock market crash was not enough, in December of 2008, Christina suffered a stroke.  Fortunately, it was not a severe stroke.  At first the doctors thought that it was actually a TIA as many of her symptons were minor. The next morning the MRI results confirmed that it was indeed a stroke and it had caused some minor brain damage.

Christina made a remarkable recovery and within a few short months was almost back to where she was before the stroke.  If you didn’t know Christina you wouldn’t have any idea that she had even had one.

As a successful business owner and mother, Christina had always been a big believer in the advantages of owning critical illness insurance.  At first, she had some concern that because her stroke was not that serious and she had recovered so quickly, that her claim might not qualify for payment.  These fears turned out to be unfounded as days after the stroke she received claim cheques for $400,000.

During her recovery period, Christina was fearful of having another stroke which caused her some stress however, she is certain that not having any financial worries during this time aided in her almost total recovery.

These two case studies, although quite different in circumstances illustrate some key points about Critical Illness insurance:

  • A life threatening illness or condition can strike anyone regardless of age or health;
  • Financial security reduces stress which can assist in the recovery process;
  • You do not have to be disabled to be eligible for a Critical Illness benefit;
  • Although you need to be diagnosed with a life threatening illness, you do not have to be at “death’s door” in order to have your claim paid;
  • The benefits are paid tax free to the insured


Call us to see if critical illness is right for you or use the social sharing buttons below to share this article with a friend or family member you think might benefit from this information.



If you have ever thought that life insurance was something you wouldn’t need after you reached a certain level of financial security, you might be interested in knowing why many wealthy individuals still carry large amounts of insurance. Consider the following:

  • A life insurance advisor in California recently placed a $201 million dollar life insurance policy on the life of a tech industry billionaire;
  • Well known music executive David Geffen was life insured for $100 million;
  • Malcolm Forbes, owner of Forbes Magazine, was insured at the time of his death in 1990 for $70 million.

While life insurance is most often looked upon as a vehicle to protect ones family or business, the question that springs to mind is why would individuals with wealth need life insurance?

The most common factor connecting people of wealth is that they have a substantial amount of deferred income tax that must be paid upon death.  In addition, they often have a strong desire to make a substantial donation to a favourite charity or educational institution.

“Life insurance is an efficient way to transfer money to your heirs.” – Malcom Forbes

In Canada, individuals are deemed to have disposed of all their assets at fair market value when they die, which often results in taxable capital gains and other deferred taxes coming due. Paying premiums for insurance that will cover these taxes is almost always less expensive and more efficient than converting assets.

When allocating your investment dollars, it is helpful to understand what investments have the highest exposure to income tax.

Fully Tax Exposed

Investments which are taxed at the highest rate of income tax:

  • Interest bearing instruments such as bonds, savings accounts, guaranteed investment certificates;
  • Rents;
  • Withdrawals or income from registered plans such as RSP’s or RPP’s.

 Tax Advantaged

Investments which are taxed at lower rates of income tax:

  • Investments which are taxed as a capital gain;
  • Dividends;
  • Flow through share programs;
  • Prescribed annuity income.

Tax Deferred

Investments on which income tax is deferred until the asset is disposed of or the investor dies:

  • Registered Savings Plans;
  • Individual and Registered Pension Plans
  • Investments producing deferred capital gains.

Registered plans, in addition to having the growth tax deferred also have the added advantage of the contributions being tax deductible.

Tax Free

Certain investment assets are totally free of income tax:

  • Principal residence;
  • Tax Free Savings Accounts;
  • Death benefit of life insurance policies.

Life Insurance as an Investment

While the death benefit of life insurance policies is tax free, it is important to recognize that this also includes the investment gains made on the cash value portion of the policy. With this in mind, many investors have discovered that by allocating a portion of long term investments to a Universal Life or Participating Whole Life policy, the results can be significant when compared to tax exposed or tax advantaged investments.

Life Insurance for Estate Planning

One of the main objectives of estate planning is to maximize the amount we leave to our families or bequeath to our favourite charities. What many wealthy families have learned is that one of the easiest ways to accomplish this is to reduce the portion of the estate which is lost to the government to pay taxes at death.

While this helps explain why many individuals of wealth maintain life insurance, it also underscores the advantages of life insurance to anyone who will have taxes or other liquidity needs at death. In addition, using life insurance as part of a charitable giving strategy can provide significant benefits to both the donor and the charity.

As Malcolm Forbes alluded to, for providing capital to protect your family’s future financial security, paying taxes at death and creating a charitable legacy, nothing is more efficient or effective than life insurance.

Please feel free to share this article with anyone who may find it of interest.



The new rules governing CPP were introduced in 2012 and they take full effect in 2016. The earliest you can take your CPP Pension is age 60, the latest is 70. The standard question regarding CPP remains the same – should I take it early or wait?

While you can elect to start receiving CPP at age 60, the discount rate under the new rules has increased. Starting in 2016, your CPP income will be reduced by 0.6% each month you receive your benefit prior to age 65. In other words, electing to take your CPP at age 60 will provide an income of 36% less than if you waited until age 65.

CPP benefits may also be delayed until age 70 so conversely, as of 2016, delaying your CPP benefits after age 65 will result in an increased income of 0.7% for each month of deferral. At age 70, the retiree would have additional monthly income of 42% over that what he or she would have had at 65 and approximately 120% more than taking the benefit at age 60. The question now becomes, “how long do you think you will live?”

Assuming that an individual has $10,000 of CPP pension at age 65, and ignoring inflation (CPP income benefits are indexed according to the Consumer Price Index), the following table compares the total base income with that if benefits are taken early or late:


CPP Benefit Commencement

Total benefit received         Age 60      Age 65      Age 70

One year                                        $6,400      $10,000     $14,200

Five years                                     $32,000     $50,000    $71,000

Ten Years                                     $64,000     $100,000   $142,000


The question of life expectancy can be a factor in determining whether or not to take your CPP early. For example, according to the above table if you take your pension at age 60, by the time you reach age 65; you would already have received $32,000 in benefits. With $10,000 in pension income commencing at age 65 the crossover point would be age 73 (the point at which the total income commencing at age 60 equals the total income commencing at age 65). If you were to die prior to age 73, you would have been better off taking the earlier option.

If your choice is to delay taking the pension until age 70 instead of 65, the crossover would not be reached until age 85.

Some individuals may wish to elect to take the pension early and invest it hoping that the income from age 60 combined with the investment growth will exceed the total income that would be received by starting at 65.

Remember, if you elect to take your pension before 65 and you are still working, you must continue to contribute to CPP. After age 65, continuing contributions while working are voluntary. On the plus side, these extra contributions will increase your pension under the Post-Retirement Benefit (PRB).


Reasons to take your CPP before age 65

  • You need the money – number crunching aside, if your circumstances are such that you need the income then you probably should exercise your option to take it early;
  • You are in poor health – if your health is such that your life expectancy may be shortened, consider taking the pension at 60;
  • If you are confident of investing profitably – if you are reasonably certain that you can invest profitably enough to offset the higher income obtained from delaying your start date then taking it early may make sense. If you are still continuing to work, you could use the CPP pension as a contribution to your RSP or your TFSA.


Reasons to delay taking your CPP to age 70

  • You don’t need the money – If you have substantial taxable income in retirement you may want to defer the CPP until the last possible date especially if you don’t require the income to live or support your lifestyle;
  • If you are confident of living to a ripe old age – if you have been blessed with great genes and your health is good you may wish to consider delaying your CPP until age 70. Using the earlier example and ignoring indexing, if your base CPP was $10,000 at 65 then the pension, if delayed until age 70, would be $14,200. If you took the higher income at 70, you would reach the crossover point over the age 65 benefit at age 84 and after that would be farther ahead.


This information should help you make a more informed choice about when to commence your CPP benefits. Even if retirement is years away it is never too early to start planning for this final chapter in your life. Call me if would like to discuss your retirement planning.

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